With over 45 years of experience in the software estimation field, you might say we know a thing or two about the subject.  This is why we wanted to define key principles with our Software Estimation Basics series. Let's start with a common question we hear a lot: what is a top-down estimate?

What Is Top-Down Estimation?

Top-down estimation is a technique that uses high-level, summary project goals or constraints - scope, cost, schedule, resources, and productivity - to evaluate all possible scenarios to meet a project's goals and the risks associated with each scenario.  Top-down estimation is the best approach to employ early in the project and project portfolio planning process when very little is known.

A common misconception about top-down estimation is that it is used solely to produce a ballpark figure for cost. As we'll explain more in this post, good top-down estimates calculate values for key management metrics, not just cost.

A top-down estimate can be generated by anyone who needs to know a software project's budget, schedule, or staffing - project managers, anyone in the PMO, technical architects, cost analysts, and product owners. C-suite executives can leverage top-down estimates when they need to approve project budgets and schedules.

Software development has always been challenging.  In the digital age, where every company is a technology company, successful business outcomes depend on successful software project outcomes.  A well-designed, flexible software process improvement plan is critical to getting the right technology, people, and practices in sync and delivering at the highest level.

This in-depth guide will teach you everything you need to know about software processes improvement. You will learn critical strategies, like:

• how to to build practices that align with organization strategies,
• how to promote efficiency and quality,
• and how to adapt to business and technology innovation.

Written by industry expert Laura Zuber, this guide shares a wealth of knowledge from Laura's 28 years of experience in software development consulting and early adoption of Capability Maturity Model (CMM) guidelines. Implementing these best practices will help you achieve process maturity at your organization.

Read the guide!

Would you say it's resource capacity planning? Building continuous integration? Knowing if vendor bids are competitive? As a follow up to a recent post I shared on reducing uncertainty in digital transformation, I posed this question to my LinkedIn connections in a poll, giving them options I sourced from respected colleagues with experience in digital transformations. I also asked for suggestions not listed, in case there were challenges I might not have considered.  I appreciated the great feedback I received and wanted to share the valuable insights I gleaned from the poll.

42% voted for “Capacity Planning” as their biggest challenge, 29% voted for “Continuous Integration,” 10% voted for “Vendor Bid Evaluations,” and 19% voted “Other."

How many times have you been in a situation when plans for cost, quality, staff, or duration have been confirmed, but a few weeks later the program veers off track? Maybe the targets were unrealistic, the requirements changed, or there were communication disconnects along the way. Unfortunately, these issues happen all the time with digital transformation, often times after the delivery roadmap has already been set!

Digital transformation is a big topic these days and the benefits can be huge. Many organizations are re-examining the way they do business from rebuilding in-house systems, to moving to the cloud, to changing how they interact with their clients. They are trying to answer questions like: how can we improve our decision making processes? And how can we better support our clients? Building the technology to support changes can be a complicated road.  Wouldn’t it be great to be able to leverage a navigation system for these challenges? A system that provides a big picture view and also the necessary details to help guide your team as they move forward. At QSM, we provide this type of solution for our clients. It’s called SLIM-Control, a data-driven adaptive forecasting tool that curve fits to the actual data that directly reflects what’s happening throughout the transformation process.  The cost, schedule, and quality forecasts are generated by the actual data and QSM's empirically-based models.

Football season is well underway, and as a loyal football fan I enjoy watching my team go through the highs and lows of wins and losses. Many of the weekly games come down to crucial plays where coaches must decide the plays to call.  Coaches now more than ever are analyzed by what plays they called or how they managed the game.  It’s interesting that these days you often hear of data driven decision making and what the analytics say.  More and more, technology is playing a big role in our lives, including sports.  Like so many industries, data-driven approaches are using models to determine “win probability”.  The data is now being used to determine if a team will go for it on 4th down, punt, kick the extra point, go for a 2-point conversion, and even when to take time outs!  This has changed how coaches manage the game. The analytics provide coaches the ability to make informed decisions and defend their actions based on data.  Coaches can now make critical decisions with confidence.  John Harbaugh (Baltimore Ravens Head Coach) is known to have an analyst in his ear during games feeding him probabilities. 

What if you could do the same for your software delivery?  QSM’s SLIM-Estimate tool leverages industry trends on similar projects along with your own historical data to provide valuable insight on potential cost and schedule outcomes. That’s like having your own personal analyst in your ear. 

Estimation can be time-consuming. Whether it's gathering initial requirements from stakeholders, performing risk trade-off analysis, or reworking estimates when plans change, these processes can take days or, worse, weeks that you simply don't have.

We hear that. And at QSM, our goal has always been to make the estimation process as quick and painless as possible. For almost 45 years, we've refined our tools to provide accurate project predictions with very few inputs required. Leveraging the power of industry data and proven mathematical models, you can generate defensible estimates within minutes and examine alternative scenarios without tedious rework. But as with any tool, there is a learning curve and we recognize how hard it is to find time in a busy schedule for training. We want to get you set up and reaping the benefits of our tools so you can get back to working with your team to ensure that your clients and stakeholders are happy with the overall product delivery. This is why we're introducing the SLIM Pilot QuickStart, a training and coaching program with flexible delivery designed to work with individual client schedules.

We believe the best way to learn is to learn by doing. The SLIM Pilot QuickStart program is an online, instructor-led live session that focuses on applying QSM's SLIM estimation tools and best practices to your current measurement problems. This "learn as you go" approach allows you to improve your estimation process quickly to improve the bottom line. The program centers around a 2-hour intro session filled with a wealth of information including: 

Moving to the cloud is big business these days. With any type of digital transformation; managing the migration, integration, and development work can be a stressful experience with a lot of risk. Wouldn't it be great to have a crystal ball that allowed you to make these big cost, staff and schedule decisions early in the planning process? I'll propose the next best thing: a database of completed and validated projects spanning multiple industries and development methodologies that can help you predict the way your project will behave.

The QSM Industry Database can provide this type of knowledge. With over 40 years of research and development, it includes metrics from thousands of completed technology projects from various application domains and industries. By leveraging this type of database, you can access industry benchmarks that can help you navigate the uncertainty that comes with planning IT transformations, software engineering, and cloud migrations.

What should this cloud migration cost? How long should it take? How many people will you need? What level of quality and productivity needs to be achieved to have a successful delivery? What are the chances of finishing within a 6-month time frame versus a 10 month? The secret to finding these answers is in the historical data. The way to bring that data to life is to use good scope-based estimation methods. In a view from QSM's SLIM-Estimate tool below, you can see some examples of how you might measure the size of a particular cloud migration to get started with an estimate.

If you were unable to attend our recent webinar, "Making Better IT Cost & Scope Decisions with Top-Down Estimation," a replay is now available.

This year thousands of software, cloud migration, and IT development managers will spend long hours developing very detailed, bottom-up plans. Unfortunately, many of these plans will be unreliable, because they don't take into account the big picture. Generating top-down estimates, before detailed planning occurs, allow managers to see the overall development and delivery targets for cost and scope. This allows for managing project expectations and even negotiation before work gets underway.

This presentation includes a Q&A session with the audience and covers such topics as:

• How to generate top-down estimates early in the decision-making process
• Best practices for IT estimation
• How to leverage historical data to improve estimation

Keith Ciocco has more than 30 years of experience working in sales and customer service, with 25 of those years spent with QSM. As Vice President, his primary responsibilities include supporting QSM clients with their estimation and measurement goals, managing business development and existing client relations. He has developed and directed the implementation of the sales and customer retention process within QSM and has played a leading role in communicating the value of the QSM tools and services to professionals in the software development, engineering and IT industries.  

Register now to reserve your spot for this webinar presented by Keith Ciocco on Sept. 15th at 1 PM EDT.

This year thousands of software, cloud migration, and IT development managers will spend long hours developing very detailed, bottom-up plans. Unfortunately, many of these plans will be unreliable, because they don't take into account the big picture. Generating top-down estimates, before detailed planning occurs, allow managers to see the overall development and delivery targets for cost and scope. This allows for managing project expectations and even negotiation before work gets underway.

In this session, you will learn:

• How to generate top-down estimates early in the decision-making process
• Best practices for IT estimation
• How to leverage historical data to improve estimation

About the presenter:

In most organizations, spreadsheets play a vital role for a variety of uses, from time keeping to budgeting to even estimating software development releases.  They offer a level of familiarity - most of us cut our technical teeth on spreadsheets from a young age and have grown with them as we advanced our careers.  When it comes to estimating software development, spreadsheets are a common “go-to,” but an estimation tool offers more flexibility, timely “what-if” changes and far less complexity for new and seasoned estimators alike.

Have you ever been in an organization in which the estimation spreadsheet was so complex and cumbersome that only a select few knew how to use it?  This leaves an organization vulnerable to perhaps a single link of institutional knowledge upon which they are making vital business decisions.  And if that one project manager, analyst or architect leaves the organization, switches roles, or retires, what then?  Even if they go on vacation for 2 weeks, you’re left with a spreadsheet that may have an impossible learning curve for anyone else hence delaying or possibly negating the estimates being created at all.